Automation could save UK used car dealers over £1m yearly, says Autofinity

Autofinity has revealed that UK dealer groups could save more than £1m ($1.2m) each year by automating their used car online merchandising processes.

This finding comes after an extensive analysis conducted with several dealer groups across the UK, focusing on the costs associated with marketing used vehicles online.

Led by Autofinity chief solutions officer Chris Banks, the study assessed the numerous tasks involved in vehicle merchandising.

It identified 21 separate tasks, including validating the price of the vehicle in the market; updating prices; amending classified portals, the dealer’s own website and the manufacturer website; review market rating of the vehicle; and manage inbound leads.

The initial setup, involving vehicle entry into the dealer management system (DMS), image and video uploads, and listing on various websites, was estimated at 46 minutes per vehicle.

At an hourly staff rate of £13, this translated to £20.15 per vehicle. Ongoing weekly maintenance of 142 minutes per vehicle cost £30.77.

When applied to a stock of 2,000 vehicles, the initial setup costs amounted to £40,300. Considering an average of 45 days in stock and a turnover rate of 8.11, the total cost reached £326,878.

Including ongoing updates and administration while vehicles are in stock, the costs soared to £61,533 per week, or £266,644 per month, culminating in an annual expenditure of £3.2m.

Banks said: “We were conservative in our estimates of the time to complete a task and how often these are undertaken over the course of the vehicle in stock.

“We liaised with our dealer group partners to check the authenticity of our figures. When we showed our analysis, the feedback was almost a resigned realisation that the cost to the business, both in terms of resourcing and pounds and pence, was so high.

“Our intention was to show in granular detail, the expenditure on one part of the business and explain how automation can improve efficiency and therefore save costs whilst freeing up the time of employees, but even we were shocked.

“On the positive side, automation can very quickly make an impact and using the same modelling we have calculated that a dealer group could save more than £1m a year.”

Autofinity said its ViHUB platform can significantly reduce these costs by automating many of these tasks. It eliminates the need for double keying, and pooling vehicle data improves data efficiency and accuracy.

With ViHUB, initial setup costs are nearly halved to £18 per vehicle, leading to a monthly saving of £155,856, or an annual saving of £1.87m.

The potential savings on initial marketing setup costs alone amount to £26,433, equivalent to £214,404 a year.

By integrating systems and automating updates, dealers can save an additional £13 per vehicle per week, which translates to a monthly group-wide stock management saving of £110,789, or £1.33m a year.